WIND REVIEWS ITS YEAR & IDENTIFIES SIGNS OF THINGS TO COME

American Wind Energy Association (AWEA) Notes Wind Industry Highlights of 2009
Shawna Seldon, December 22, 2009 (AWEA)

SUMMARY
The wind energy perspective on 2009 was probably about as perfect a measure of the entire nation’s experience of the year as any. Like the nation that gave itself over to the incoming administration’s audacity of hope, wind’s year began with “high expectations.”

The nation and the wind industry then watched innovative policies that might have spurred growth and good things get chewed up in the teeth of a bitter contention between the forces of tomorrow and the forces of yesterday. Belief in the possibility of change dissipated. And the nation, along with the wind industry, then spent the balance of the year “buffeted by financial and economic storms…”

Still, as noted in Wind Industry Highlights of 2009, the year-end summary from the American Wind Energy Association (AWEA), important trends emerged, there were major indicators of what will come in better times and the year was not without a list of the top 15 remarkable accomplishments and developments:

(1) The American Recovery and Reinvestment Act (ARRA) of 2009 made financing new and ongoing projects possible;
(2) 2008 plans to expand U.S. wind industry manufacturing slowed but was sustained;
(3) Public support for a strong national Renewable Electricity Standard (RES) requiring regulated utilities to obtain 25% of their power from New Energy sources by 2025 held up;
(4) 192 of the world’s governments continued negotiating on climate change right through December’s Copenhagen summit, spurring debate and spotlighting urgencies;
(5) A National Academy of Sciences (NAS) study revealed that conventional sources of electricity generation are really comparable in cost to New Energy when the dangers and damages done by nuclear energy and fossil fuels are included in the calculation;
(6) The U.S. and the rest of the world grew another year wiser about the need to eliminate fossil fuels, improve the health and well-being of the environment and conserve precious water resources, even in power generation;
(7) The Obama administration began restoring research and development (R&D) funding for New Energy;
(8) A team of wind power experts gave the industry a “B” on its progress toward achieving the Department of Energy-set goal for wind of providing 20% of U.S. power by 2030.
(9) More states passed laws boosting the development of New Energy;
(10) Several initiatives from the private and public sectors moved plans for crucial improvements to the national transmission system ahead;
(11) Wind and the Department of the Interior advanced the streamlining of siting;
(12) A crucial NREL study showed properly sited wind projects do no discernible harm to property values and a joint U.S./Canada wind industries study concluded the sound of properly sited wind turbines is not detrimental to human health;
(13) AWEA membership grew by 1,000 and WindPower 2009 was once again the biggest and fastest growing conference & Exhibition in the country;
(14) The beginning of construction on the first U.S. offshore wind project got closer to a reality;
(15) The small wind for homes and businesses sector of the industry continued to grow.

Wind keeps growing and it's a national phenomenon. (click to enlarge)

The top 10 trends that emerged and the indicators that will reveal how those trends will develop:

(1) Wind power appears likely to be the nation’s second biggest source of new electricity generation for the 6th year in a row in 2010;
(2) Ongoing public support for the Renewable Electricity Standard (RES) makes it a strong candidate for inclusion in the jobs legislation likely to be put through Congress early this year with uncharacteristically bipartisan support;
(3) As the economy recovers and foreign investors move to take advantage of the riches of ARRA, the U.S. wind turbine and supply chain manufacturing industry could regain its 2008 momentum;
(4) The riches of ARRA and the potential riches in pending energy and climate legislation have set up what could be a brutal competition on Capitol Hill and in public opinion between the Old and New Energies and their proxies, the lobbyists;
(5) 1.5 megawatt wind turbines are now standard, 2 megawatt wind turbines are becoming commonplace and there have been big orders for 2.5 megawatt turbines, so turbine size may now be limited only by how big designers and engineers can dream;
(6) Federal regulation of transmission decisions remains highly contentious but states, regions and grid operators are working through their differences and making key decisions and this could lead to big investment in new transmission systems;
(7) As wind becomes an ever-bigger part of electricity generation, grid operators in the U.S., Europe and China are becoming more skilled at effectively integrating it seamlessly into the transmission system, making the use of yet more wind more likely;
(8) The 8-year extension of the uncapped 30% federal Investment Tax Credit for small wind systems for homeowners and small businesses will likely lead to another year of record-breaking growth;
(9) Initiatives involving the Wind Turbine Guidelines Advisory Committee, the U.S. Fish and Wildlife Service and a broad range of stakeholders is expected to result in a streamlined wind project siting process that will facilitate growth; and
(10) AWEA and the industry are also developing stronger and more concrete operational and safety guidelines that should also lend to growth.

On the whole, 2009 was probably most notable for the fact that despite a devastating downturn in the world’s economy and the best efforts of New Energy naysayers, legislative recalcitrants and fossil fuels, nobody seems able to stop wind’s growth. It’s just too useful, safe, clean, environmentally-friendly and affordable a source of big power generation.

click to enlarge

COMMENTARY

(1) The American Recovery and Reinvestment Act (ARRA) of 2009 made financing new and ongoing projects possible;

Provisions in ARRA were designed to drive development of New Energy by sustaining, along with the Treasury Grant Program, its financing despite the almost complete disappearance of tax equity funding. By the end of the year, $1.5 billion in crucial capital had been made available. In the 2nd half of 2009, at least 37 wind projects, representing the potential to power the equivalent of 800,000 homes, got grants. This sustained the wind industry and helped it become one of the few bright spots in the U.S. economy.

(2) 2008 plans to expand U.S. wind industry manufacturing slowed but was sustained;

Announcements of new facilities and production activity at existing facilities slowed. This could bode ill for new projects in 2010, although the passage of a good national Renewable Electricity Standard (RES) could give the industry the jump it needs. By giving manufacturers a sense of market certainty, an RES would attract investment and allow the emergence of a domestic turbine manufacturing industry that could potentially create hundreds of thousands of jobs.

click to enlarge

(3) Public support for a strong national Renewable Electricity Standard (RES) requiring regulated utilities to obtain 25% of their power from New Energy sources by 2025 held up;

A 2009 poll indicated that more than three-quarters of the country wants a strong RES to drive New Energy growth. As always, favor for New Energy is strong on both sides of the partisan divide. 71% of Independents and 62% of Republicans support a strong RES. Later in the year, polls found that residents of Mid-Atlantic coastal communities support the development of offshore wind and over 90% of the country supports solar energy.

(4) 192 of the world’s governments continued negotiating on climate change right through December’s Copenhagen summit, spurring debate and spotlighting urgencies;

The 15th United Nations Climate Change Conference of the Parties (COP15) in Copenhagen was, at best, a triumph of limited possibilities. But, stepping back from the desperation that the urgency of global climate change cannot help but inspire, it was pretty remarkable that so many nations with so many points of view and axes to grind could at least come together and take issue with one another.

Assuming the situation does not grow so dire that humankind must evolve gills, it is possible history will, in a hundred or two hundred years, look back at Copenhagen as the moment when the community of nations realized it had greater responsibilities than it had ever before imagined. In that realization, real action can be sourced. One thing is certain: Whatever the international community decides or does not decide, wind will keep building emissions-free generation.

click to enlarge

(5) A National Academy of Sciences (NAS) study revealed that conventional sources of electricity generation are really comparable in cost to New Energy when the dangers and damages done by nuclear energy and fossil fuels are included in the calculation;

Fossil fuels cost the U.S. $120 billion per year in damages to human health, a cost that does not show up in calculations of how much the nation pays for its oil and coal dependency. Coal plants alone generate $62 billion in human health damages. And the NAS calculations did not include climate change costs created by fossil fuel spew. With an authoritative voice like NAS proclaiming that it is inaccurate to compare the Old and New Energies’ costs without including the damage done from Old Energy emissions and pollutions, it becomes more difficult to avoid the question – and it becomes more difficult to avoid the logic of New Energy.

(6) The U.S. and the rest of the world grew another year wiser about the need to eliminate fossil fuels, improve the health and well-being of the environment and conserve precious water resources, even in power generation;

The entire U.S. wind turbine fleet avoided the emission of 57+ million tons of greenhouse gases in 2009, the equivalent to taking 9.5+ million cars off the road; wind also allowed the nation to avoid 200,000 additional metric tons of acid-rain causing sulfur dioxide and 80,000 additional metric tons of smog-causing nitrous oxide; and wind conserved 20+ billion gallons of water that would have otherwise been consumed by traditional nuclear and fossil fuel power plants.

click to enlarge

(7) The Obama administration began restoring research and development (R&D) funding for New Energy;

An $80 million appropriation, $25 million over 2008 and $5 million more than the budget request, was allotted to the U.S. Department of Energy’s (DOE) Wind Program as part of the 2009 energy and water appropriations bill. It included an additional $22.8 million for wind-specific projects. That $80 million allocation, the highest inflation-adjusted R&D funding to wind since 1981, reversed a long, New Energy innovation-defeating trend.

(8) A team of wind power experts gave the industry a “B” on its progress toward achieving the Department of Energy-set goal for wind of providing 20% of U.S. power by 2030.

The experts looked at the wind industry’s progress in 4 key areas – Technology Development, Manufacturing, Siting, and Transmission & Integration – and concluded that there was “solid B” level progress toward generating a fifth of U.S. electricity with wind within 2 decades. Why only a B? The wind industry is doing its part but without strong national policies that drive New Energy growth, the incentives don’t add up.

click to enlarge

(9) More states passed laws boosting the development of New Energy;

With the passage of a law in Kansas, 29 states have Renewable Electricity Standards (RESs). It was no coincidence that multinational corporate titan Siemens announced at the time of the Kansas RES passage that it would build a turbine blade production facility in the state. Other important policy measures were advanced in other states. Rhode Island and Delaware moved provisions to make offshore wind projects easier to build. Wisconsin put in place statewide siting reforms for wind projects. And, despite the challenges of a stagnant economy, Illinois, Texas, Washington and other states are developing significant tax incentives that will make the economics of wind projects better for developers.

(10) Several initiatives from the private and public sectors moved plans for crucial improvements to the national transmission system ahead;

Controversially, the wind industry insists it needs new transmission capacity and cites as evidence 300,000 megawatts of wind projects in the development pipeline awaiting connection approval. Green Power Superhighways: Building a Path to America’s Clean Energy Future, published jointly by the wind and solar industries, details the inadequacies of U.S. transmission infrastructure and points to solutions. Both industries have also formally called on the Federal Energy Regulatory Commission (FERC) to restructure the cost burden of new transmission so that all those who benefit share in paying the price.

click to enlarge

(11) Wind and the Department of the Interior advanced the streamlining of siting;

At the urging of the New Energy industries, the federal government issued a Memorandum of Understanding (MOU) to improve coordination among nine federal agencies and minimize delays in the federal lands permit approval process. In addition, the wind industry continues to work with all federal and environmental agencies and organizations on research that will allow for more protection of birds, bats and other species through scientific siting and operational parameters.

(12) A crucial NREL study showed properly sited wind projects do no discernible harm to property values and a joint U.S./Canada wind industries study concluded the sound of properly sited wind turbines is not detrimental to human health;

As detailed in 2009, THE FIGHT FOR NEW ENERGY & WHY THE WIND INDUSTRY WINS IT, two new scientific studies exemplified one-half of the wind industry’s two pronged approach to establishing itself as a world energy powerhouse.

The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis, from researchers at Lawrence Berkeley National Laboratory, showed that properly sited wind projects do no discernible harm to property values. Wind Turbine Sound and Health Effects; An Expert Panel Review,
a paper written by a panel of medical and acoustics experts and published jointly by AWEA and CanWEA, concluded that the sound of properly sited wind turbines is not detrimental to human health.

Besides its unrelenting persistence in building, the other half of the wind industry’s two pronged approach to establishing itself as a world energy powerhouse, wind answers its critics with clear-eyed scientific evidence that the real enemy is not wind but wind’s detractors.

click to enlarge

(13) AWEA membership grew by 1,000 and WindPower 2009 was once again the biggest and fastest growing conference & Exhibition in the country;

Despite the slow economy, AWEA saw its biggest single-year membership growth ever bigger as businesses laying plans for a better future gathered to a winner.

(14) The beginning of construction on the first U.S. offshore wind project got closer to a reality;

The Minerals Management Service (MMS) of the Department of the Interior (DOI) set long awaited guidelines for the siting of marine energy projects. Subsequently, Midwestern states issued requests for Lake Erie and Lake Ontario proposals and Mid-Atlantic states called for power purchase agreement proposals. The state of Massachusetts, which for 8 years had fought Cape Wind (the first U.S. offshore wind proposal), finalized a comprehensive plan for ocean energy development. And the insiders' money is on Rhode Island to complete installation of the nation’s first offshore turbines, probably in 2011.

click to enlarge

(15) The small wind for homes and businesses sector of the industry continued to grow.

The Fall 2008 emergency bailout legislation extended the 30% federal Investment Tax Credit to the full value of small wind systems for 8 years. This benefit is expected to sustain the continuing expansion of the small wind sector of the industry. To boost consumer confidence in the systems they purchase, the U.S. Department of Energy (DOE) and Environmental Protection Agency (EPA) Energy Star consumer certification program incorporated small wind systems, the first time Energy Star has addressed electricity-generating technology. In support of Energy Star certification and greater consumer assuredness, AWEA finalized new safety and performance standards. AWEA is also upping its participation in market development, in anticipation of increasing interest.

What to watch for:

(1) Wind power appears likely to be the nation’s second biggest source of new electricity generation for the 6th year in a row in 2010;

Wind generates ~ 2% of U.S. electricity but has been second only to natural gas as a source of new power generation since 2005. It does not seem to be losing any momentum going into 2010.

click to enlarge

(2) Ongoing public support for the Renewable Electricity Standard (RES) makes it a strong candidate for inclusion in the jobs legislation likely to be put through Congress early this year with uncharacteristically bipartisan support;

Wind manufacturing facilities and wind projects are huge undertakings and the folks that invest in them and build them are not likely to make unequivocal commitments to the kind of building that could create a domestic wind and wind supply chain manufactory that would employ hundreds of thousands without a clear commitment in return. What they need is a statutory requirement that regulated U.S. utilities must obtain a significant (25%) portion of their power from New Energy sources over a long time period (by 2025). With the certainty of a stable, guaranteed demand for their products, wind companies will get busy like this nation has only seen in times of great energy and technology booms. Without it, that boom will happen in China.

(3) As the economy recovers and foreign investors move to take advantage of the riches of ARRA, the U.S. wind turbine and supply chain manufacturing industry could regain its 2008 momentum;

But recovery will only come with supportive policies like a strong RES.

click to enlarge

(4) The riches of ARRA and the potential riches in pending energy and climate legislation have set up what could be a brutal competition on Capitol Hill and in public opinion between the Old and New Energies and their proxies, the lobbyists;

The Old Energies will not go gentle into that good night. There is way too much money at stake. Spending on lobbying over energy issues in 2010 could go beyond the record 2009 levels. Expect the fighting to get ugly. Expect to hear the worst things ever about New Energy as Old Energy pulls out all the old half-truths and scurrilous misrepresentations. In late 2009, bogus studies funded by fossil fuel money began appearing. The good news: The uglier the fight gets, the better the New Energy industries can be assumed to be doing.

(5) 1.5 megawatt wind turbines are now standard, 2 megawatt wind turbines are becoming commonplace and there have been big orders for 2.5 megawatt turbines, so turbine size may now be limited only by how big designers and engineers can dream;

There are 1,000+ wind turbines larger than 2 megawatts in operation in the U.S and at the end of 2009 the Shepherd’s Flat wind project in Oregon ordered 338 GE 2.5-megawatt turbines. The trend toward bigger turbines is driven by economics: Taller turbines with larger swept areas produce more kilowatt-hours at a lower per kilowatt-hour cost. In Europe, wind manufacturers are already turning out 5-megawatt turbines for the rugged offshore environment.

click to enlarge

(6) Federal regulation of transmission decisions remains highly contentious but states, regions and grid operators are working through their differences and making key decisions and this could lead to big investment in new transmission systems;

One of the most contentious issues in New Energy is transmission. New transmission is expensive and hard to get approved. Some lines cost $1-to-$2 million dollars a mile and can take 6-to-12 years to satisfy regulatory requirements and get built. Meanwhile, the solar industry says it cannot expand in the Southwestern deserts without more wires, the wind industry says it has 300,000 megawatts waiting in the pipeline for interconnection approval and environmentalists insist new transmission is a coal industry ploy and/or an intolerable invasion of threatened species habitat.

The contention has tied up efforts at the federal level to get FERC to take regulation out of the hands of state and regional players locked in old rivalries. The good news is that there seems to be some opening up at the state and regional levels as grid operators and state regulators begin to find common cause in bringing more power on the lines and bringing upgrades to an ever more antiquated and fragile system. Texas and the Southwest Power Pool, having worked through cost allocation issues, are opening up to investment and new infrastructure. If the Midwest Independent System Operator (MISO) moves in the same direction, it will likely set in motion nothing less than a trend to effective, rivalry-settling cost allocation policies.

(7) As wind becomes an ever-bigger part of electricity generation, grid operators in the U.S., Europe and China are becoming more skilled at effectively integrating it seamlessly into the transmission system, making the use of yet more wind more likely;

Intermittency is not the challenge, integration of various generation sources is the challenge. As grid supplies diversify, grid operators are learning to integrate them. There will be several important wind integration studies coming in 2010 and they are all expected to show that wind can readily be a big part of a reliable power supply without a significant cost impact.

The next challenge: Dealing with fossil fuel competitors’ efforts to impose a new and unfair tariff on wind at the grid operator level. The claim is that the need for New Energy integration imposes an expense on the operator. The reality is that the cost to the operator is just as great for keeping the Old Energies engaged as it is for bringing the New Energies on line.

click to enlarge

(8) The 8-year extension of the uncapped 30% federal Investment Tax Credit for small wind systems for homeowners and small businesses will likely lead to another year of record-breaking growth;

Watch small wind grow with (1) increasing availability and (2) standards that assure consumer safety and turbine reliability.

(9) Initiatives involving the Wind Turbine Guidelines Advisory Committee, the U.S. Fish and Wildlife Service and a broad range of stakeholders is expected to result in a streamlined wind project siting process that will facilitate growth;

Studies on (1) wind projects’ impacts on property values, on (2) wind turbines’ impacts on human health and on (3) wind projects’ effects on birds, bats and other species habitats have repeatedly shown that the key is proper siting. The success of the wind industry at solving its challenges is the result of its commitment to identify and use the best sites. The scientific pursuit of the knowledge of how to best do that is unrelentingly ongoing.

(10) AWEA and the industry are also developing stronger and more concrete operational and safety guidelines that should also lend to growth.

Though its volume is not yet as great as some sources of power generation, wind is now as mainstream as any other energy. Clear about the need for a variety of standards and guidelines, AWEA and the wind power industry are working with the Occupational Safety and Health Administration (OSHA) on workplace safety standards. AWEA is also in the process of developing best practices and safety awareness training programs.

Look for the 2010 wind power industry to be ready when political leaders awaken. The need is urgent but wind power, the nation’s most mature source of emissions-free, environmentally-friendly domestic electricity generation, has an answer to the need. Given the right kind of policy support at the federal level, the wind industry will kick-start a whole New Energy boom of unprecendented enormity that will ignite the domestic economy, put the heartlands back to work, ease the burden of impending climate change and turn the nation away from reliance on spew and blood fuels.

click to enlarge

QUOTES
- Denise Bode, CEO, AWEA: "Wind power is a symbol of hope in our economy and supports thousands of jobs, but U.S. wind turbine manufacturing is lagging at the very time that the global clean energy race is heating up…One of the most urgent measures that our government can enact is a national Renewable Electricity Standard, which will unleash in the U.S. a wave of manufacturing investment that will otherwise go overseas. Many companies are eager to enter or ramp up their activities in this sector, as this year’s highlights show, but all need to see a long-term commitment with hard targets to renewable energy in order to be able to invest."